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Spotlight on digital claims: Where next for digital claims?

Future magnifying glass

Digital claims processing offers significant benefits for personal lines insurers and their customers. But, while there’s been a seismic shift in the use of digital services as a result of the pandemic, most insurance customers still face a hotchpotch of online and offline support when they submit a claim.

Just how unusual a fully digital claims journey is can be seen in the results of the The Digital Claims Survey conducted by Post, in association with 360Globalnet. When asked about their digital claims capabilities, just 13.3% of respondents say they can settle simple claims without human involvement, with a further 20% saying it was an option for some simple claims [see graph one]. The overwhelming majority – 66.7% – are still dependent on at least some human involvement in even the simplest of claims. 

Destination digital

Although insurers are keen to move forward in this space, the focus so far has been on claims notification.  “We offer a full suite of e-first notification of loss across major personal lines of business,” says Amy Brettell, head of customer and market insight at Zurich Insurance. “There’s also an asynchronous messaging service that enables them to contact us through their platform of choice during the claims process, without having to provide a full history if they switch platforms.” 

This eFNOL focus is evident with many other insurers too. For example at RSA Insurance, customers can start their claims online, including uploading documents and basic claims information including any photographic evidence of the event.

Functionality and the degree of adoption of eFNOL varies greatly. Our survey found that 33.3% of respondents enable customers to report claims online across all policy classes, with the majority – 58.3% - saying it’s an option for some but not all lines of business [see graph two]. This leaves 8.3% of respondents without any eFNOL functionality. 

It is extremely positive that so many firms are offering at least some digital options at FNOL but the gap between the can-dos and the rest widens when drilling down into the functionality on offer.

Data downloads

Half of the survey respondents allow customers to upload photos and videos of their claim on any smartphone or PC, with a further 16.7% restricting this to certain devices or only allowing photos [see graph three]. A third don’t have any digital solutions for uploading this data.


Document uploads prove even more tricky, with 61.7% not offering this option and just 18.3% allowing it for all types of file [see graph four]. Given this, it’s not surprising that only 18.3% of respondents offer customers the opportunity to participate in live-streaming videos, which can be invaluable where a loss adjuster or engineer may struggle to visit in person.

Some insurers may still be looking to get their eFNOL processes in order, but others are more advanced in the digital journey. Aviva has digitised 50% of its customer journeys with some even able to access a completely digital process. Neil Ashley, head of digital claims at Aviva, explains: “Direct customers can log claims with us digitally for motor and home and track the progress of their repairs throughout. Motor customers who report online can also access straight through processing, so they can go from reporting their claim to booking their repair without having to contact us in person at all.”

But our survey shows that this level of functionality is far from the norm. Once online notification is received, just 18.3% of respondents say their system can triage the claim automatically. The majority – 58.3% – say they have a mix of manual and automatic processes, while 23.3% say everything has to be handled manually [See graph five].


Automated ambitions

Although the results of the survey show insurance isn’t as switched on to digital as other sectors, there is plenty of evidence that catch-up is well underway.

On his wish list, Akhlas Hafiz, director of digital transformation & customer delivery at RSA, would like to see straight through processing to payment for more simple claims as well as supplier integration to link in the customer to the supply network. “This would allow us to leverage technology and data, delivering an improvement in efficiency and providing a better customer experience,” he explains. 

Brettell is also looking to push ahead with digital transformation. She has been testing more digital processes in pockets across property claims but is looking to scale and extend these into other business lines before the end of year. “We wanted to make sure that if we were investing in technology that it was something that we could utilise at scale,” she says. “We started in a more complicated area as it’s then easier to scale.”

Aviva is also pressing ahead with its plans, aiming to have 75% of its customers journeys digitalised by 2023, starting with the launch of straight through processing for home contents claims later this year.

There has also been a flurry of activity over the summer months, with insurers launching new digital claims propositions. This includes Axa Insurance, which launched its straight through electronic processing programme in August. This delivers end-to-end digital capability for some claim types in retail motor. “We intend to expand the number of claims that can be covered by this journey in motor and across home insurance claims,” explains Melanie Kill, claims transformation director at Axa UK.

Markerstudy is also launching more digital functionality for its pet insurance customers, with online claims services available from the end of August. This will enable them to make, amend and track their claim online. “We want to be able to review and pay eligible pet insurance claims within 24 hours of the intervention,” says Ross Hallifax, affinity director, Markerstudy Broking.

Digital challenges

Although some insurers are more advanced than others in achieving straight through claims processing, all admit there are some significant hurdles to overcome. For Martin Milliner, claims director at LV, the complexity of claims presents a challenge. “There are so many variables in claims, from transactional ones to those that are highly complex. Finding a solution that fits all is difficult,” he says. “Insurance is not like online banking.” 

To illustrate this, he points to a windscreen chip repair, which is easy to resolve through a digital process, and to a multicar pile-up, where the level of detail and support required make it virtually impossible to service digitally. “It has to be light touch and easy to use,” he adds. “Where there are only five or so questions a digital claim works well; more than that and you need someone with claims knowledge.”  

Integrating suppliers into the digital journey can also present problems. Information from these third parties is essential for insurers looking to keep customers up-to-date during a claim but different systems and attitudes to technology can prevent the flow of this data. As an example, Hallifax says that one of the main issues he had to overcome when rolling out a digital claims proposition on pet insurance was interacting with the vet practice systems.

He’s not alone in facing difficulties in this area. Our survey found that just 10% of respondents say their claims system links together all parties, with 63.3% saying it’s a mix of automatic and manual and 26.7% saying workflows are all managed manually [see graph six].   

Insurers’ own technology can be a stumbling block too. “The nature of a legacy technology estate normally presents challenges when creating an end-to-end digital experience,” says Hafiz. “We are addressing this through our transformation journey.” 

Fraud is also a concern for insurers. By removing human interaction from the claims process there is a risk that fraudsters could find ways to exploit an insurer’s system. Using robust verification and fraud identification processes can help to minimise this risk.

Full journey

Although there are challenges, it’s important that the insurance sector presses ahead and develops end-to-end digital claims processes. Only offering eFNOL delivers an inconsistent experience and potentially even risks alienating customers.

It’s something that Ashley has been careful to avoid. “Customers increasingly want the convenience of digital self-service and this must be across the whole lifecycle of a claim,” he says. “Otherwise, we risk them being frustrated, either at a perceived lack of transparency in later stages of the claim or simply at having to use different channels to handle the claim.”

But our survey found that offering a digital experience beyond eFNOL was limited. Just 5% of respondents say they provide automatic updates to customers during a claim, although a further 60% offer some updates [see graph seven]. More than a third (35%) do not provide any automatic updating.


The time is right to address this, with a couple of trends making fully digital claims much more of a necessity. Milliner explains: “Covid-19 has changed customer behaviour and made them much more digitally accepting. They want and expect everything to be easy and at their fingertips. This puts more pressure on us to deliver digital claims solutions.”  

Many insurers report an uptick in online activity over the pandemic. Figures from Zurich show that up to 30% of claims are now lodged online, with the proportion doubling in most lines of business.

Aviva has also seen a shift to digital. User logins to its My Aviva app increased by 45% during 2020 with 65% of motor customers now using its online claims journey to report a loss, with this increasing to nearly 75% for customers who come to it through price comparison websites.

As well as customer expectations, operational efficiencies are also putting pressure on insurers. “The UK personal lines market is the most competitive in the world,” says Milliner. “Digitalisation offers an opportunity to take some costs out.”

Culture change

Switching from a largely offline claims process to one that’s fully digital may have become a necessity but insurers also accept that it will require some fundamental changes in their organisations. 

For starters, insurers need to start thinking more like technology firms. “We can’t have multi-year multi-million-pound IT projects anymore,” says Brettell. “To keep pace with customer expectation, we must run much smaller projects and be prepared to test them with customers and abandon them if they don’t work.”

Another key part of the cultural change that Brettell’s seen is the role of employees. “Employee buy-in is one of the biggest things we’ve focused on as we introduced digital claims processes,” she says. “We have to listen to them. You can have the best technology but if you don’t have employees who want to engage with it, it won’t work.” 

Another equally important stakeholder is the customer according to Milliner. “Digital shouldn’t be something you do to customers,” he says. “Insurers need to listen to them and shape solutions around them.”

Insurers also need to be careful they don’t focus on digital at the expense of other claims channels. “Customers will prefer the speed and ease of online self-service for some types of interaction but, given the nature of claims, there will also be a requirement for personal interaction in some of those instances where the empathy, compassion and skill of an experienced claims hander is essential,” says Kill.

Benefits for all

Delivering a slick digital experience that allows customers to access a claims handler where necessary has benefits for all parties. Customers appreciate the convenience, speed of service and greater visibility of their claim while employees benefit from a shift away from some of the simpler administrative tasks to more interesting ones where their experience can really add value.

This translates into benefits for insurers too. “Every customer reacts differently to the way their claim is handled but we tend to get better feedback from customers who manage their claim online versus those who opt to deal with us offline,” says Ashley.

Delighting customers in this way can help to break the renewal switch cycle too. Even in today’s hotchpotch world, the quality of claims service makes a significant difference with a 2019 study finding that seven out of 10 home insurance customers renew with their insurer after filing a claim, with 18% citing good customer service as their reason to stick.

And, as customers become used to the digital experiences they receive in other areas, insurers recognise it’s time to change. Brettell says that one of her proudest moments was seeing a customer post on social media that their claim had been opened, paid and closed in 11 minutes. “Yes, it was a relatively straightforward household claim but I don’t want this type of comment to attract attention,” she says. “This should be the norm: we should be able to settle claims quicker and deliver this level of service.” 

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